A peer-to-peer (P2P) exchange is a decentralized digital marketplace that allows users to buy and sell cryptocurrencies directly to one another. There is no need for a third-party intermediary. Unlike a traditional exchange, a P2P exchange does not hold user funds or require them to go through an account verification process before engaging in transactions.
Instead, P2P exchanges link buyers and sellers who agree on the terms of the trade, allowing them to make peer-to-peer transactions without the intervention of a third party. The main advantages of using P2P exchanges are that they provide users with greater privacy, anonymity, and more control over the purchasing and selling process.
Furthermore, because P2P exchanges are not custodial in nature, traders have full control over their funds and do not need to worry about security breaches exposing their assets to unauthorized users. A P2P exchange can be used by individuals or organizations in order to buy currencies and commodities rapidly and anonymously.
All transactions occur directly between two parties, eliminating the extra costs incurred when using a third-party intermediary. Furthermore, P2P exchanges are much more secure than traditional exchanges since they rely on blockchain technology to keep the transactions secure and free from fraud.
P2P exchanges also provide users with access to markets that may not be available on traditional exchanges, allowing for access to a larger range of investments, regardless of whether the user is an institutional or private investor.